GSMA at odds with EU over price caps

The GSM Association (GSMA) has claimed that the European mobile industry is being forced to cut back on new network and service investment - like mobile broadband - due to retail price caps by the European Union.

Excessive profits have been cited to justify the caps, but a report by management consultancy company AT Kearney shows return on capital employed in 2006 for the European mobile industry was just nine per cent, compared with 20 per cent in several other sectors.

AT Kearney also estimate that this figure was equal or slightly less in 2007.

Tom Phillips of the GSMA - which represents over 700 GSM mobile phone companies - said the mobile industry was in a "major investment cycle" to create new services like mobile broadband, which would increase Europe's economic competitiveness.

However, he warned: "It is clear that the high level of investment required to provide these services across Europe won't happen if regulators continue to distort the market by setting prices."

One man who has been getting the best out of mobile broadband is Iayn Dobsyn, who downloaded his favourite TV programme while on holiday in Portugal.

The IT worker was faced with a £31,500 bill on returning home.